5 ms·

What's the catch?

by 1f60c 6y ago

What's the catch?

alborzb 6y ago
The catch is that their slogan is just falsehood. > No discounts, no debt, no dilution. It is debt, because it is a loan. Just financed in a different way. and the no discounts part is just untrue, their own screenshots and examples show a fee. That fee is the discount.
- nojvek 6y ago
  Yeah. This is very sleezy marketing.
aparsons 6y ago
It’s a payday loan for businesses from what I can tell. I see about 10 ads a day from these guys, so some more things I observed: - They’re trying to build a capital market aspect on payday loans - essentially, turn “SaaS subscription stock” into “SaaS subscription future” and let people trade it... except, that is a terrible investment with little to no upside. The company can go under, reduce prices, and in general a subscription worth $k is equivalent, at best, to holding $k in cash with no interest. - So to make investors “buy”, you give them a discount. Which means, for all intents and purposes, there is interest. There is debt (where does accounts payable go on a balance sheet?) contrary to their marketing material. Debt + interest, with your future earnings as collateral = payday loan. Plus some lipstick to distract you from this fact.
jacurtis 6y ago
The "catch" is that they take a 6% rake off the annual amount. This means you get 94% of the annual contract value. So for a $1,000 agreement, you would keep $940. Still a pretty good deal if you ask me. Its also pretty nice because they calculate it off of the extrapolated monthly term, which is already priced higher (usually) than the annual term. What i mean by this is how often have you seen a SaaS service that sells a product for $99 per month, OR $999 per year? Pretty common, right? Well in this case the SaaS is already offering the customer a 20% discount for paying annually upfront. But in the case of Pipe, they take the $99/mo customer, extrapolate the total they will pay for the year out to $1,188. That is what they pay you out on, so they take a 6% rake from that, which means the company gets $1,116.72. That's higher than the $999 they ask for annual agreements with customer's directly. So it's a pretty good deal for the company.

What's the catch?

by 1f60c 6y ago

What's the catch?

The catch is that their slogan is just falsehood. > No discounts, no debt, no dilution. It is debt, because it is a loan. Just financed in a different way. and the no discounts part is just untrue, their own screenshots and examples show a fee. That fee is the discount.

nojvek 6y ago
Yeah. This is very sleezy marketing.

aparsons 6y ago

It’s a payday loan for businesses from what I can tell. I see about 10 ads a day from these guys, so some more things I observed: - They’re trying to build a capital market aspect on payday loans - essentially, turn “SaaS subscription stock” into “SaaS subscription future” and let people trade it... except, that is a terrible investment with little to no upside. The company can go under, reduce prices, and in general a subscription worth $k is equivalent, at best, to holding $k in cash with no interest. - So to make investors “buy”, you give them a discount. Which means, for all intents and purposes, there is interest. There is debt (where does accounts payable go on a balance sheet?) contrary to their marketing material. Debt + interest, with your future earnings as collateral = payday loan. Plus some lipstick to distract you from this fact.

jacurtis 6y ago

The "catch" is that they take a 6% rake off the annual amount. This means you get 94% of the annual contract value. So for a $1,000 agreement, you would keep $940. Still a pretty good deal if you ask me. Its also pretty nice because they calculate it off of the extrapolated monthly term, which is already priced higher (usually) than the annual term. What i mean by this is how often have you seen a SaaS service that sells a product for $99 per month, OR $999 per year? Pretty common, right? Well in this case the SaaS is already offering the customer a 20% discount for paying annually upfront. But in the case of Pipe, they take the $99/mo customer, extrapolate the total they will pay for the year out to $1,188. That is what they pay you out on, so they take a 6% rake from that, which means the company gets $1,116.72. That's higher than the $999 they ask for annual agreements with customer's directly. So it's a pretty good deal for the company.